Nakabayashi : ［Delayed］Consolidated Financial Results for the Three Months Ended June 30, 2022 (Based on Japanese GAAP)

Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

Consolidated Financial Results for the Three Months Ended June 30, 2022

(Based on Japanese GAAP)

				August 5, 2022
Company name:	NAKABAYASHI CO., LTD
Stock exchange listings:	Tokyo
Stock code:	7987	URL: https://www.nakabayashi.co.jp/
Representative:	President and Representative Director	Hideaki Yumoto
	Executive Officer and General Manager
Inquiries:	of Accounting Department,	Hiroshi Nishiuchi	TEL [phone]
	Administration Division
Scheduled date to file Quarterly Securities Report:	August 8, 2022
Scheduled date to commence dividend payments:	-
Preparation of supplementary material on quarterly financial results:	No
Holding of quarterly financial results meeting:	No

(Amounts less than one million yen are rounded down)

1. Consolidated financial results for the three months ended June 30, 2022 (from April 1, 2022 to June 30, 2022)

(1) Consolidated operating results (cumulative)		Percentages indicate year-on-year changes
		Net sales		Operating profit	Ordinary profit	Profit attributable to
			owners of parent
	Three months ended	Millions of yen		%	Millions of yen	%	Millions of yen	%	Millions of yen	%
	June 30, 2022	13,534		(3.6)	(157)	-	2	(99.2)	(139)	-
	June 30, 2021	14,046		0.5	168	(34.2)	310	(21.2)	310	74.2

(Note) Comprehensive income:	Three months ended June 30, 2022:	¥(99) million	[-%]
			Three months ended June 30, 2021:	¥433 million	[17.2%]
		Earnings per share	Diluted earnings
		per share
	Three months ended		Yen		Yen
	June 30, 2022		(5.09)		-
	June 30, 2021		12.03		-

(2) Consolidated financial position

			Total assets		Net assets	Equity ratio
	As of		Millions of yen	Millions of yen	%
	June 30, 2022		57,716		28,073	45.7
	March 31, 2022		58,225		28,504	46.1
(Reference) Equity:	As of June 30, 2022:	¥26,348 million
		As of March 31, 2022:	¥26,861 million

2. Cash dividends

			Annual dividends per share
		1st quarter-end	2nd quarter-end		3rd quarter-end		Fiscal year-end	Total
		Yen	Yen		Yen		Yen	Yen
	Year ended March 31,	-	10.00		-		12.00	22.00
	2022
	Year ending March 31,	-
	2023
	Year ending March 31,		10.00		-		12.00	22.00
	2023 (Forecast)
(Note) Revisions of dividend forecasts from recently announced figures: No

3. Forecast of consolidated financial results for the year ending March 31, 2023 (from April 1, 2022 to March 31, 2023)

Percentages indicate year-on-year changes

	Net sales		Operating profit	Ordinary profit	Profit attributable to	Earnings
		owners of parent	per share
	Millions of		%	Millions of		%	Millions of		%	Millions of		%	Yen
	yen		yen		yen		yen
Six months ending	29,000		1.2	400		34.5	600		2.3	250		119.2	9.13
September 30, 2022
Full year	65,000		3.0	2,550		40.2	3,000		28.4	1,700		66.9	62.10

(Note) Revisions of forecasts of financial results from recently announced figures: No

4.	Notes
(1)	Changes in significant subsidiaries during the three months ended June 30, 2022
	(changes in specified subsidiaries resulting in the change in scope of consolidation):	No

1. Application of special accounting methods for preparing quarterly consolidated financial statements: No
2. Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements

Changes in accounting policies due to revisions to accounting standards and other regulations:	Yes
Changes in accounting policies due to other reasons:	No
Changes in accounting estimates:	No
Restatement of prior period financial statements:	No

(Note) For details, please refer to "2. Quarterly Consolidated Financial Statements and Major Notes, (3) Notes to Quarterly Consolidated Financial Statements, (Changes in Accounting Policies)" on page 9 of the Attached Material.

(4) Number of issued shares (common shares)

Total number of issued shares at the end of the period (including treasury shares)

As of June 30, 2022

28,794,294 shares

As of March 31, 2022

28,794,294 shares

Number of treasury shares at the end of the period

As of June 30, 2022

1,420,533 shares

As of March 31, 2022

1,420,245 shares

Average number of shares during the period (cumulative from the beginning of the fiscal year)

Three months ended June 30, 2022

27,373,924 shares

Three months ended June 30, 2021

25,800,424 shares

• This quarterly financial results report is not subject to the quarterly review by a certificated public accountant or an auditing firm.
• Explanation and other special notes concerning the appropriate use of business performance forecasts (Cautionary Statement with Respect to Forward-Looking Statements)
  The earnings forecasts and other forward-looking statements herein are based on information currently available to the Company and on certain assumptions deemed to be reasonable. Actual results, etc. may differ materially from the forecasts due to various factors. For notes on the assumptions underlying the earnings forecasts and the earnings forecasts, please refer to "1. Qualitative Information on Quarterly Financial Results,
  (3) Explanation of Consolidated Earnings Forecasts and Other Forward-Looking Information" on page 4.

○ Accompanying Materials - Contents
1.	Qualitative Information on Quarterly Financial Results .....................................................................................	2
	(1)	Explanation of Operating Results .................................................................................................................	2
	(2)	Explanation of Financial Position .................................................................................................................	3
	(3)	Explanation of Consolidated Earnings Forecasts and Other Forward-Looking Information .......................	4
2.	Quarterly Consolidated Financial Statements and Major Notes .........................................................................	5
	(1)	Quarterly Consolidated Balance Sheets........................................................................................................	5
	(2)	Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of
		Comprehensive Income ................................................................................................................................	7
	(3)	Notes to Quarterly Consolidated Financial Statements ................................................................................	9
		(Notes on the Going Concern Assumption) ..................................................................................................	9
		(Notes on Significant Changes in the Amount of Shareholders' Equity) ......................................................	9
		(Changes in Accounting Policies).................................................................................................................	9
3.	Others ................................................................................................................................................................	10

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1. Qualitative Information on Quarterly Financial Results

1. Explanation of Operating Results
   During the three months under review (from April 1, 2022 to June 30, 2022), the Japanese economy faced soaring raw material prices, the prolonged situation in Russia and Ukraine, and rapid depreciation of the yen in the foreign exchange market, despite signs of recovery in consumption activities due to psychological aspects of a decrease in the number of COVID-19 cases, and the outlook for the economy remains uncertain.
   In the environment surrounding the Company group (the "Group"), we need to revise our products and services due in part to the major change in lifestyles and corporate activities caused by COVID-19. In addition, the business environment remains challenging due to the weak yen and soaring raw material prices.
   Under these circumstances, we formulated our third medium-term management plan (from April 1, 2021 to March 31, 2024), "add+venture 70" (Adventure 70). As conventional business models and processes change dramatically depending on the new normal and DX, we have set 70 new targets to increase corporate value. To achieve the plan, we are working to optimize the allocation of management resources and create synergies among business segments and Group companies as a whole. As a concrete policy required in the era of post- COVID, the Group aims to become a leading company in the "Life-related industry" (Note), an industry field that will play a central role in the future, and will advance initiatives to strengthen existing businesses and enter new businesses. Specifically, it refers to the following five fields: (1) health and medical care, (2) environment (including renewable energy), (3) life and welfare, (4) agriculture and (5) culture.
   (Note) "Life-related industry" is a concept advocated by Professor Yoshinori Hiroi of Kyoto University.
   Net sales decreased by 3.6% year on year. An operating loss was recorded due to a worsening cost of sales ratio caused by rising raw material prices, while ordinary profit also declined. In addition, extraordinary income recorded ¥77 million, including gain on extinguishment of tie-in shares due to the absorption-type merger of unconsolidated subsidiaries, and extraordinary losses recorded ¥93 million, including loss on Anti- Monopoly Act.
   As a result, loss attributable to owners of parent was ¥139 million.

The Group's operating results for the three months under review are as follows.

Net sales	¥13,534 million (Down 3.6% year on year)
Operating loss	¥157 million (Operating profit of ¥168 million in the
	same period of the previous fiscal year)
Ordinary profit	¥2 million (Down 99.2% year on year)
Loss attributable to owners of parent	¥139 million (Profit attributable to owners of parent of
	¥310 million in the same period of the previous fiscal
	year)
Operating results by segment are as follows.
(ⅰ) Business Process Solutions Business

The business process outsourcing (BPO) business was deemed to have committed an act in violation of the Act on Prohibition of Private Monopolization and Maintenance of Fair Trade (Anti-Monopoly Act) in relation to tendering for Japan Pension Service on March 3, 2022, and was subject to a Cease and Desist Order and a Payment Order for a surcharge, so our designation was suspended for some government and public offices and municipalities for approximately two to eight months. Consequently, BPO-related sales have declined. In the library solutions business, outsourcing services, such as counter operations from public libraries, and the library binding business declined due to designation suspension.

Sales of packaging materials such as paper containers and packaging were firm in part due to a recovery in consumer sentiment and heightened awareness of plastic waste reduction.

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